Document Content

DECISION

Promulgating the Regulation on establishment and operation of Vietnam-based representative offices of foreign securities trading organizations

THE MINISTER OF FINANCE

Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Finance Ministry;

Pursuant to the Government's Decree No. 144/2003/ND-CP of November 28, 2003, on securities and securities market;

At the proposal of the Chairman of the State Securities Commission,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on establishment and operation of Vietnam-based representative offices of foreign securities trading organizations.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 3.- The Chairman of the State Securities Commission, chief representatives of foreign securities trading organizations in Vietnam and concerned parties shall have to implement this Decision.

For the Finance Minister

Vice Minister
LE THI BANG TAM

REGULATION ON ESTABLISHMENT AND OPERATION OF VIETNAM-BASED REPRESENTATIVE OFFICES OF FOREIGN SECURITIES TRADING ORGANIZATIONS

(Promulgated together with the Finance Minister's Decision No. 83/2004/QD-BTC of November 11, 2004)

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Regulation provides for the establishment and operation of Vietnam-based representative offices of foreign securities trading organizations.

Article 2.- Interpretation of terms

In this Regulation, "foreign securities trading organizations" mean securities companies and investment fund management companies, which are established and operate under foreign laws.

Article 3.- Responsibilities of foreign securities trading organizations and their representative offices

1. Vietnam-based representative offices of foreign securities trading organizations, hereinafter referred to as representative offices, shall be established and operate under Vietnamese law to seek and promote opportunities for cooperation in the field of securities and securities market with Vietnamese economic organizations but not be allowed to conduct business activities.

2. A foreign securities trading organization may establish at most three representative offices in provinces or centrally-run cities of Vietnam (hereinafter referred to as provinces or cities for short), and in each province or city, it may locate only one representative office.

3. Foreign securities trading organizations with Vietnam-based representative offices shall be held responsible before Vietnamese law for all activities of their representative offices.

4. Representative offices must abide by Vietnamese law and directly exercise the rights and perform the obligations provided for by Vietnamese law; shall have their legitimate rights and interests protected by the Vietnamese State but shall not enjoy privileges and immunities reserved for foreign diplomatic missions and consulates, and representative offices of inter-governmental international organizations in Vietnam.

Article 4.- Competence to grant, extend, amend, supplement and withdraw representative office licenses

The State Securities Commission is the agency competent to grant, extend, amend, supplement and withdraw representative office licenses, hereinafter referred to as licenses for short.

Chapter II

GRANT, EXTENSION, AMENDMENT, SUPPLEMENTATION AND WITHDRAWAL OF REPRESENTATIVE OFFICE LICENSES

Article 5.- Licensing conditions

Foreign securities trading organizations which wish to establish their representative offices in Vietnam must satisfy the following conditions:

1. Wishing to enter into cooperation in the field of securities and securities market in Vietnam.

2. Having been permitted by competent foreign agencies to establish representative offices in Vietnam. If there exist no regulations on such permission in the countries of origin, foreign securities trading organizations must show documents evidencing the non-existence of such regulations;

3. Having operated for at least three years and being currently in normal operation as reflected in their audited financial statements.

Article 6.- Dossiers of application for licenses

1. A dossiers of application for a license comprises:

a/ A license application, made according a set form (not printed herein) and signed by a competent person of the foreign securities trading organization;

b/ Valid copies of a foreign competent agency's written document, permitting the foreign securities trading organization to conduct securities trading activities;

c/ The charter of the foreign securities trading organization;

d/ Documents evidencing a foreign competent agency's permission for the foreign securities trading organization to establish a representative office in Vietnam according to Clause 2, Article 5 of this Regulation;

e/ Valid copies of audited financial statements and operation reports for the latest two years of the foreign securities trading organization;

f/ Curriculum vitae of the person expected to be appointed as the chief representative in Vietnam, with certification of a foreign competent agency for foreigners, or of a Vietnamese competent agency for Vietnamese;

g/ The operation plan of the Vietnam-based representative office for the first year.

2. Dossiers specified in Clause 1 of this Article shall be submitted to the State Securities Commission, each with two sets. Documents in foreign languages in the dossiers must be originals or valid copies issued or certified by foreign competent agencies according to regulations of the countries of origin and enclosed with their Vietnamese translations notarized by Vietnamese public notaries.

Article 7.- Procedures for grant of licenses

1. Where dossiers are invalid according to the provisions of Clause 1, Article 6 of this Regulation, the State Securities Commission shall, within five working days after receiving them, notify in writing foreign securities trading organizations thereof so that the latter shall supplement and complete their dossiers.

2. Within 30 days after receiving the valid dossiers, the State Securities Commission shall grant or refuse to grant licenses (made according to set form, not printed herein). In case of refusal to grant licenses, the State Securities Commission shall notify such in writing, clearly stating the reasons therefor.

3. Within 15 working days after granting licenses, the State Securities Commission shall send such licenses to the People's Committees of provinces or centrally-run cities where representative offices are located.

Article 8.- Registration and notification of operation

Within 60 days after being granted licenses, foreign securities trading organizations must register operation at the People's Committees of the provinces or centrally-run cities where their representative offices are located, and notify in writing the State Securities Commission of the date of inauguration, locations of their representative offices, contact telephone and facsimile numbers, number of Vietnamese and foreigners working at their representative offices.

Article 9.- Operation duration

1. The maximum operation duration of a representative office shall be five years after it is granted a license.

2. Licenses may be extended. Each extension must not exceed five years.

Article 10.- Extension of licenses

1. At least 30 days before the expiration of the duration stated in a license, a foreign securities trading organization wishing to have such license extended shall have to send to the State Securities Commission a dossier set of application for license extension, comprising:

a/ An application for license extension, signed by a competent person of the foreign securities trading organization (made according to a set form, not printed herein);

b/ Brief report on operation of the representative office in the valid duration of the license, signed by the chief representative;

c/ Valid copies of the foreign securities trading organization's annual report for the last year.

2. Each dossier specified in Clause 1 of this Article shall be sent to the State Securities Commission in two sets.

3. Within 15 working days after receiving the valid dossiers specified in Clause 1 of this Article, the State Securities Commission shall issue decisions on license extension. In case of refusal to extend licenses, the State Securities Commission shall notify such in writing, clearly stating the reasons therefor.

4. Within 15 working days after issuing decisions on extension of licenses for representative offices, the State Securities Commission shall send these decisions to the People's Committees of the provinces or centrally-run cities where the representative offices are located.

Article 11.- Renaming of representative offices

1. When wishing to rename their representative offices, foreign securities trading organizations shall file with the State Securities Commission their applications for renaming of representative offices (made according to a set form, not printed herein).

2. Within 15 working days after receiving renaming applications, the State Securities Commission shall issue decisions on approval of the renaming of representative offices. In case of disapproval of the renaming of representative offices, the State Securities Commission shall notify such in writing, clearly stating the reasons therefor.

3. Within 15 working days after issuing decisions on approval of the renaming of representative offices, the State Securities Commission shall send these decisions to the People's Committees of the provinces or centrally-run cities where the representative offices are located.

Article 12.- Relocation of representative offices

1. Where a representative office is relocated within a province or city, the chief representative shall, within 15 working days after relocation of his/her representative office, notify in writing relevant information, such as new address, telephone and facsimile numbers, to the State Securities Commission and the People's Committee of the province or city where the representative office is located.

2. Where a representative office is relocated to another province or city:

a/ When wishing to relocate to another province or city, the representative office shall send to the State Securities Commission its application for relocation (made according to a set form, not printed herein);

b/ Within 15 days after receiving the application for relocation of the representative office, the State Securities Commission shall issue a decision on approval of the relocation. In case of disapproval, the State Securities Commission shall notify such in writing, clearly stating the reasons therefor.

c/ Within 15 working days after issuing a decision on approval of relocation of a representative office to another province or city, the State Securities Commission shall send this decision to the People's Committee of the province or city where such representative office is currently located and the People's Committee of the province or city where it is expected to move to.

Article 13.- Change of chief representatives

Five working days before the projected date of change of its chief representative, a foreign securities trading organization shall have to send to the State Securities Commission a notice on such change enclosed with its decision on appointment of a new chief representative and his/her resume according to the provisions at Point f, Clause 1, Article 6 of this Regulation.

Article 14.- Termination of operation

1. A representative office shall terminate its operation in the following cases:

a/ The operation duration stated in the license expires but the foreign securities trading organization does not file an application for extension thereof or the applied license extension is refused.

b/ The foreign securities trading organization so requests.

c/ The representative office has its license withdrawn.

d/ The foreign securities trading organization terminates its operation according to foreign laws.

2. In case of operation termination specified at Point b, Clause 1 of this Article, a foreign securities trading organization shall, at least 60 days before the projected date of operation termination of its representative office, have to send to the State Securities Commission a written request for operation termination of its Vietnam-based representative office (made according to a set form, not printed herein).

3. In case of operation termination specified at Point d, Clause 1 of this Article, a foreign securities trading organization shall, at least 30 days before the projected date of operation termination of its representative office, have to send to the State Securities Commission a written notice on operation termination of its Vietnam-based representative office.

4. Fifteen working days before the date of official operation termination, a representative office shall announce its operation termination on a central newspaper or a newspaper of the locality where it is located for three consecutive issues so that concerned organizations and individuals can come to settle their rights.

5. No later than the date of operation termination, representative offices shall return their licenses to the State Securities Commission and carry out procedures for returning their rented offices and facilities and settling their debts and liabilities (if any) toward the State and concerned organizations and individuals.

6. Within seven working days after the date of operation termination of a representative office, the State Securities Commission shall notify such in writing to the People's Committee of the province or city where such representative office is located.

Article 15.- Withdrawal of licenses

A representative office shall have its license withdrawn in the following cases:

1. It supplies untruthful documents in the dossier of application for a license or dossier of application for license extension.

2. It fails to register operation within the set time limit or fails to officially commence its operation as notified to the State Securities Commission according to the provisions of Article 8 of this Regulation.

3. It has operated for wrong purposes or at variance with the contents prescribed by law.

4. It intentionally delays the submission of its operation report after the State Securities Commission makes a written reminder.

5. It violates the current provisions of Vietnamese law.

Article 16.- Fees for grant and extension of licenses

Foreign securities trading organizations shall have to pay fees for grant and extension of licenses according to the current provisions of law.

Chapter III

OPERATIONS, RIGHTS AND OBLIGATIONS OF REPRESENTATIVE OFFICES

Article 17.- Operations

1. Acting as liaison and market-survey offices;

2. Promoting the formulation of projects on cooperation in the field of securities and securities market in Vietnam;

3. Urging and supervising the performance of contracts or agreements already signed between foreign securities trading organizations and Vietnamese economic organizations, and projects funded by foreign securities trading organizations in Vietnam in compliance with Vietnamese law.

Article 18.- Rights of representative offices

1. To conduct operations specified in Article 17 of this Regulation.

2. To rent offices and dwelling houses and furnish them with means in service of their operations and daily-life activities according to current provisions of Vietnamese law.

3. To open accounts exclusively for payments in foreign currencies and Vietnam dong at banks licensed for foreign exchange operations in Vietnam to serve their operations according to the provisions of Vietnamese law.

4. To employ Vietnamese and foreigners to work at their offices according to the provisions of Vietnamese law.

5. To import into Vietnam articles necessary for their operations and daily-life activities, and pay taxes and carry out procedures for the import thereof according to the provisions of Vietnamese law.

6. To have their own seals according to the Public Security Ministry's regulations and use these seals for transactions within the ambit of their powers and functions in Vietnam.

7. Their chief representatives may sign contracts on cooperation with Vietnamese economic organizations in the field of securities and securities market under valid authorization by foreign securities trading organizations, except for business contracts or contracts on provision of profitable services in Vietnam. The representative offices shall have to send to the State Securities Commission copies of authorization letters within 10 working days after the signing of contracts.

Article 19.- Obligations of representative offices

1. To purchase compulsory insurances according to the provisions of Vietnamese law.

2. To pay taxes, fees and charges according to the provisions of Vietnamese law.

3. To report on their operations once every year to the State Securities Commission before the last working day of the first month of the subsequent year. Each report shall contain:

a/ Organizational and managerial structure;

b/ Number, full names, dates of birth, places of birth and nationalities of staff members (including Vietnamese and foreigners) working at the representative offices and personnel changes (if any) in the year.

c/ Works performed in the year.

d/ Works projected to be performed in the next year.

4. In case of necessity, representative offices shall, at the request made in writing by the State Securities Commission or a competent state management agency according to the provisions of Vietnamese law, have to report, supply documents or explain matters related to their operations.

Article 20.- Restrictions and prohibitions applicable to representative offices and their staffs

1. Representative offices must not:

a/ Sublease their offices or dwelling houses.

b/ Transfer, lease or lend their licenses to any organizations or individuals.

c/ Function as representatives of Vietnam-based traders and Vietnamese or foreign economic organizations.

d/ Conduct business or provide profit-making services in Vietnam in any form.

2. Staff members working at representative offices must not:

a/ Perform by themselves the function of representing traders or other economic organizations relating to the field of securities and securities market in Vietnam.

b/ Work for traders and other economic organizations relating to the field of securities and securities market in Vietnam.

Chapter IV

INSPECTION, SUPERVISION AND HANDLING OF VIOLATIONS

Article 21.- Inspection and supervision

Representative offices shall submit to inspection and supervision by the State Securities Commission and other state management agencies according to the provisions of Vietnamese law.

Article 22.- Handling of violations

Representative offices which violate the provisions of this Regulation shall, depending on the nature and seriousness of their violations, be administratively sanctioned or examined for penal liability according to the provisions of Vietnamese law.

Chapter V

IMPLEMENTATION PROVISIONS

Article 23.- Implementation provisions

Amendments and supplements to this Regulation shall be decided by the Finance Minister.